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Issue 40 (November 1999)
Employers to pay up in equal pay claims
Stigma damages in breach of contract
Don't bank on statutory maternity pay, mum!
Top brass defeated
Pay in lieu of notice liable to tax
Recovering personal injury compensation as well?
Banks v Tesco Stores
(IDS Brief 648)
The case of Banks v Tesco Stores Ltd , Employment Appeal Tribunal 15 September 1999 is yet another episode in the now long line of decisions, from Employment Tribunal to European Court of Justice, restricting the use of the discrimination legislation to enhance maternity benefits.
Mrs Banks worked part-time for Tesco, earning £56 gross per week. She became pregnant and took maternity leave, and sought to claim statutory maternity pay. Her claim was refused on the basis that her earnings were below the qualifying threshold.
Under the Statutory Maternity Pay Regulations 1986, a woman is only entitled to statutory maternity pay if her normal weekly earnings are above the lower earnings level, which at the relevant time was £57 per week. She was also not entitled to maternity allowance, incapacity benefit, or income support.
Mrs Banks argued that by refusing her any state benefits at all, there was a breach of Article 119 (now Article 141), in particular as interpreted by the European Court of Justice decision of Gillespie v Northern Health Board 1996 ICR 498.
According to Gillespie, Article 141 did not lay down any specific criteria for determining the minimum amount of maternity pay, providing "that the amount is not set so low as to jeopardise the purpose of maternity leave." Mrs Banks argued that her ineligibility for statutory maternity pay did precisely that.
The Employment Appeal Tribunal, "with some diffidence" disagreed. They relied on the terms of the Pregnant Workers Directive 1992, which postdates Gillespie, and which states in clause 11 that maternity payments may be made conditional upon the woman fulfilling some criteria. Accordingly, they concluded, it was lawful for the Statutory Maternity Pay Regulations to require some minimum earnings threshold.
In the face of the obvious conflict between the decision in Gillespie, and clause 11 of the Pregnant Workers Directive, the Employment Appeal Tribunal opted for the interpretation which favoured the clear terms of the Directive, as opposed to the potentially open-ended discrimination point. In the light of the European decision in Boyle v EOC 1998 IRLR 717, this disappointing decision can come as little surprise.
The one positive part of the judgment is the confirmation that SMP comes within the definition of 'pay' for Article 141 and equal pay purposes.